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Bulls go shopping at Fifth & Pacific

Fifth & Pacific is hitting long-term highs, and the bulls are piling into the apparel company.

optionMONSTER's Heat Seeker tracking program detected two bullish trades in the retail stock, which today hit its highest price since the October 2008 market crash. First, they sold 1,000 March 13 puts for $0.18 and bought an equal number of March 17 calls for $0.53. The trade cost $0.35 and is similar to owning stock.

Later in the session, investors bought the March 17 calls by themselves, pushing volume past 4,000 contracts at the strike. There was no open interest when the session began, so new money is being put to work.

Buying calls locks in the price where shares can be bought, while selling puts obligates traders to buy stock if it drops. Both strategies benefit from stock prices going up, so combining them can result in strongly leveraged positions. (See our Education section)

FNP is trading at $15.48 this afternoon, up 2.52 percent on the session and 35 percent in the last three months. While the company's results have been weak in recent quarters, management has promised that business is improving at its Juicy Couture brand. The Kate Spade brand also experienced rapid growth last quarter.

Total option volume is 11 times greater than average in the name so far today.